OREANDA-NEWS. June 16, 2011. In the 21st century, human labour can no longer be viewed as merely a cog in the chain of mechanical production or a depersonalised tool for achieving economic targets. We need to rethink the fundamental role and value of labour. I would go so far as to say that contemporary societies and economies would not be able to develop sustainably if human capital were not given precedence and if conditions were not created for each individual to fully realise their economic potential.
I am very grateful to the director-general of the International Labour Organisation for his invitation. I would like to welcome all the participants in the 100th session of the International Labour Conference. It is a great honour for me to address this representative assembly and share my views on some of the latest economic and social trends.

First of all, I would like to point out the crucial role that the International Labour Organisation plays as one of the oldest and most influential institutions in the international arena. Under a spectrum of political conditions, throughout economic slowdowns and recoveries, the organisation has consistently protected the interests of workers and their right to fair and safe labour conditions and stable social security. The Nobel Peace Prize that was awarded to the ILO in 1969 is a testament to that enduring mission. The organisation's effectiveness is largely rooted in its unique tripartite structure, in which governments, employers and trade unions have an equal say in decision-making. It was this constructive social dialogue that enabled the ILO to come up with the most appropriate and well-considered initiatives when the international community faced truly serious challenges during the global financial and economic crisis in 2009 and 2010. Indeed, these days, the global economy is slowly recovering, but the consequences of that economic turmoil are still being felt. Russia, for example, has not yet made a complete recovery even though there are clear trends in that direction. The Russian economy has recovered by more than two-thirds, but still remains below its pre-crisis level. Naturally, in these circumstances, it is very easy to end up resorting to actions that would in fact violate fundamental human rights and freedoms and thus engender new risks.

We all realise that economic problems and imbalances are systemic in nature and that it is extremely difficult, if not impossible, to eliminate the underlying causes with merely cosmetic and palliative measures. It is apparent that a more sustainable and balanced model for economic growth is necessary to enable progress for the entire international community rather than a closed economic elite or small cadre of privileged states.

In this respect, I would like to emphasise that governments, businesses, and international political and financial organisations have no right to neglect their fundamental responsibility to the people or their social mission. We believe that this is one of the biggest lessons of the recent crisis and that it must be given full account when charting a long-term development strategy. This strategy should be centred around the individual and their right to a decent life and the utmost fulfilment of their knowledge and capabilities.

In the 21st century, human labour can no longer be viewed as merely a cog in the chain of mechanical production or a depersonalised tool for achieving economic targets. We need to rethink the fundamental role and value of labour. I would go so far as to say that contemporary societies and economies would not be able to develop sustainably if human capital were not given precedence and if conditions were not created for each individual to fully realise their economic potential. This sounds like a self-evident, logical, and indisputable thesis. But, in practice, we often see a crude discrepancy of interests, to put it mildly.

At a private meeting with the director-general, we discussed a number of issues, and he said a very important thing – namely, that we need to achieve balance. It is difficult to argue with that. But any government, despite the fact that it pursues social goals – and I can assure you of this – will need to ensure economic growth, boost tax revenues, and mobilise funds for major projects and programmes to attain these goals. Very often, one is blinded to the social issues that lie behind these major government projects and programmes, and social interests somehow fall by the wayside. One gets the impression that these programmes pursue an agenda of their own. Some programmes do not have anything at all to do with social objectives, for example, defence and security programmes.

Businesses, in their turn, strive for maximum labour efficiency, low costs, and maximum profits, frequently keeping wages at a minimum or even terminating jobs. Unfortunately, they often neglect labour safety. At the same time, workers seek decent labour conditions and fair remuneration for their contribution to the economy and to profit. We always keep in touch with our trade unions, and we often fall into disagreement. Frankly speaking, it is very important that the workers' representatives are well versed in economics so that their demands reflect economic realities rather than unlawful or ungrounded premises that would threaten to crash the system.

Unfortunately, one has to admit that in the current situation, the requirements of economic efficiency and the interests of state practicability do not always coincide with the imperatives of social and humanitarian development.

How does one balance the interests of the state, the business community, and workers? How does one create conditions for decent labour while protecting key economic and market indictors and growth indices? At present, no one has a universally applicable and systemic answer. That is why it is so important to establish a broad and engaged dialogue surrounding these ideas, concepts, and opinions – to open a discussion that is not confined to professional matters but will make it possible to arrive at a truly just solution.

Your organisation, the International Labour Orgnisation, provides excellent opportunities for a multi-faceted “brain storm”  approach to these problems. I repeat that the ILO is unique in that it brings together governments, businesses, and trade unions; that is, from the start, it offers objective conditions for working out truly balanced solutions. That the ILO focuses its attention on this theme is borne out by the Global Jobs Pact, which was adopted, unanimously, in June of 2009. The underlying thesis of this trail-blazing document is the renunciation of simple decisions in implementing anti-crisis measures, above all wage and social benefits cuts. I have to say that Russia does not merely support the Global Pact but is doing all it can to prevent the burden of economic hardship from resting on the shoulders of people. This was our guiding principle in preparing and implementing the national anti-crisis programme. I must stress that it was the result of the joint work of the government, the business community, and the trade unions in our country.

Our experience has only confirmed the importance of having a smoothly running and durable mechanism for regulating labour relations. Crucial in that regard are instruments of social partnership that make it possible to address the problems that arise through negotiations and search for compromises by taking into account mutual interests and real opportunities. As a result, we have managed to preserve basic social standards and constructive relationships between all social partners. Let me be frank: we are very grateful to the members of the business community and the trade unions. It is always a difficult dialogue, very difficult. But, on the whole, we have managed to make it constructive – to create a constructive atmosphere and ultimately arrive at a consensus.

We chose not to freeze pensions, benefits, and public sector wages. In fact, far from freezing them, we moved forward. We decided not to postpone urgently needed modernisation projects in healthcare and education, demographic development and the support of families. Russia is the only country in the world that, at the height of the crisis, prepared and executed a large-scale modernisation of the pension system: last year, pensions in Russia increased by 45% within one year period.  And not only pensions. We indexed all social benefits without exception. Everything that was planned in the pre-crisis period has been carried through. Of course, it was hard to adjust pensions, say, in the public sector.

But, at the end of 2008, we increased the public sector wage fund by a hefty 30%. Unfortunately, we did not manage to index public sector wages in 2010. This year, we are doing it in the summer, with an increase of 6.5%. We are considering and will certainly take the next step, which is not even envisaged in the budget next autumn.

In fact, an active and aggressive social development policy has become a major instrument in combating the crisis. I have to subscribe to the words of the secretary general, who told me during our talk today that, in supporting the poorest social strata, we are absolutely in the right because these are the very people who do not save or set aside money for tomorrow or the day after tomorrow. They just go to the store and spend their money, effectively supporting national agriculture because, as a rule, let’s face it, they buy the cheapest things, and these are usually domestically produced goods.

We have continued to improve labour legislation, for example, by introducing the best international labour standards as confirmed by ILO documents. Thus, in 2010, we ratified four ILO conventions, including the Workers’ Representatives Convention that expands the opportunities for the activity of trade unions at enterprises.

The Russian government has made the most of its reserves and opportunities to shore up the national economy – above all, the real sector, which provides the largest number of jobs. A series of government measures were aimed at stimulating demand in the automobile, machine-building, and other production sectors. The construction industry received massive aid. We have managed to avoid widespread bankruptcies and closures and prevented a dramatic rise in unemployment. We laid the foundation for the renovation and increased efficiency of our enterprises. Ambitious jobs programmes have been launched in cooperation with the regions. The state has offered financial support in organising public works, the retraining of personnel, the creation of small businesses, and migration to new places of residence and work. We have come up with a series of projects for single-industry towns, or mono-cities, as we call those communities whose survival depends on only one or two enterprises. As a result, in 2009-2010 alone, more than 4 million jobs were created or restored in Russia. Unemployment calculated according to ILO methodics dropped from 9.4% in February 2009 to 7.2% in April 2011, although we understand that this is still a high figure. And in general, far be it from me to give the impression that our actions to minimise the aftermath of the crisis have been ideal, but it cannot be said that we have not done our utmost to take the social factor into account.

The Russian government is determined to continue pursuing an active policy in the labour market and to seek not just to provide jobs but to upgrade professional standards and, hence, the social status of the worker – to create conditions in which people can acquire new skills and training for which there is greater demand and to modernise professional education. As I was just telling my colleagues, we are moving forward from the anti-crisis support measures that we worked out with businesses and labour unions: we are allocating resources, including from the federal budget, for the training and retraining not only of those who lost or may lose their jobs but also, for example, women who are on childcare leave or women who work in hazardous occupations. We have provided money for parents who are raising disabled children. In other words, after devising measures to overcome the crisis on the labour market, we have proceeded to extend them to other categories of citizens who are not officially unemployed. I believe that this is an absolutely justified and reasonable thing to do, and it should yield positive results. We intend to help the most socially vulnerable categories of citizens: the disabled, parents of children with disabilities, and so on. In a word, we are creating and will create all the conditions for the development of human resources in our country as the chief guarantor of our national success and progress.

We estimate that by the beginning of next year, the Russian economy will completely recover from the crisis. Perhaps we will reach this benchmark as early as the end of this year. But we are already working on long-term plans and a post-crisis development strategy and getting down to the ambitious task of bringing Russia into the top five world economies and raising the per capita GDP from the USD 19,700 of today to more than USD 35,000 over the next decade. To achieve these goals, we have to at least double our labour productivity, and the bar has to be set even higher in high-tech sectors, where productivity should increase some three or fourfold.

In the Russian economy, the public sector must shed inefficient jobs and create at least 25 million modern, high-paid positions. That is a challenge, but it can be met. I am referring to the creation of new jobs and the restoration of old ones. Existing jobs must be transformed to acquire new quality. To give you an idea of the scale involved, let me say that the Russian economy currently employs about 70 million people – some 69 million or thereabouts – which means that one in every three jobs must be modernised. This is a national priority for the next 15-20 years, and it must be achieved through the concerted effort of society as a whole – there is no other way. I am sure that the state, businesses, and trade unions will be natural allies and partners in this task. And, make no mistake, we will not compromise our high level of social guarantees and will not permit an increase  of the 40-hour week, nor are we going to skirt occupational safety and environmental standards. Moreover, as regards occupational safety, last year we passed a series of regulatory acts, laws, and enabling legislation at the federal level that enhance the responsibility of the state and businesses for occupational safety.

Dynamic economic development, innovation, and modernisation are not ends in themselves. Their value is in opening up new opportunities for people, boosting wages and professional skills, curtailing hazardous and harmful production, laying the foundation for prosperous and strong families, raising living standards, and, in short, transforming the quality of life. Thus, we intend to concentrate our efforts on creating new labour conditions that meet the needs and requirements of the modern man.

Our actions are in accord with the ILO’s Decent Work agenda. We share its main premises and concerns, and, indeed, we are ready to promote them globally, which brings me to a concrete proposal: to hold a high-level international conference in Russia next autumn devoted to the implementation of the principles laid out under the Decent Work concept. I hope, ladies and gentlemen, that you and the members of the ILO will support this initiative.

In conclusion, I would like to express my confidence that the ILO will continue to address urgent problems of social and economic justice and, in doing so, stimulate genuine respect for fundamental human rights and freedoms.

I would like to thank you for your patience and attention and to wish you all the best.